A few days ago the Washington Postpublished an investigative piece about World of Warcraft. Well, it wasn’t exactly about that — it was about Internet Gaming Entertainment (IGE) and that company’s involvement in what we can most charitably call the gray market of internet gaming — gold farming, maxed-avatar selling, gear selling, etc. And of some interest, but I fear not surprise, the current chief advisor to the President of the United States, Steve Bannon — odious enabler of American Nazism and white supremacy — was one of the company’s executives.

Bannon saw so much opportunity in the prospect of game cheating that he persuaded Goldman Sachs and a consortium of Wall Street investment firms to invest $30 million in the company. Thirty. Million. Dollars. Eventually, IGE went out of business (I think — it is hard to track corporate restructuring and acquisitions and such), but in their heyday they did up to 8-10 million dollars of business per month.

The Post article was actually old news — similar shorter pieces have been appearing in online gaming news sources and blogs for a few months now — but it had some new details and gave a good picture of the seamier side of internet gaming. If you have some time, I recommend you give it a read.

At any rate, my point today is not that the President of the United States places faith and trust in a sleazy cheater, nor even that American economic policy is now being controlled by former employees of firms eager to invest in exploitation of game cheating. Rather, I would like to examine the notion of morality in the current world of internet gaming, using the IGE saga as a vehicle and Blizzard as one of the principal protagonists.

First, who were the winners and losers in the IGE morality play? Clearly, IGE was ultimately the loser — they went down in rather ignominious fashion, not with a bang but an impoverished, debt-ridden whimper. At their profit zenith, they had tried to buy off Blizzard and other game companies by offering them a share in the profits if the companies would legitimize IGE’s activities. As WoW represented a huge share of IGE’s business, Blizzard’s decision here was key and likely the deciding factor in IGE’s final demise. Blizzard said no, and in my eyes that makes them — and WoW players — the winner.

I don’t actually know why they refused, but I am giving them the benefit of the doubt and attributing it to a sort of foundational morality, a gut instinct that selling advantages in a game is just wrong. The real answer, of course, is more complicated, I suspect. A lot of factors persuaded Blizz to go after IGE with a vengeance rather than be co-opted.

One factor may have been that Blizz touted the game as one of merit not money, and they set up the subscription model to support this. Gaming companies need to make a profit, and selling subscriptions rather than virtual gear or gold was a good way to make money, especially in the early days of the game before spinoffs and endorsements and T-shirts and the like bring in much. To allow players to buy their way into max levels or high gear — without experiencing the game as intended — was contrary to everything Blizz had advertised about WoW.

A second factor was that the WoW player base was overwhelmingly against “pay to play”. Almost certainly, had Blizzard opted to throw in with IGE, they would have lost millions of players. Such a decision might have actually resulted in the destruction of the game. There is no doubt that this kind of strategic assessment played a part in Blizz’s final decision. They might have increased profits in the short term, but in the long run there was a good chance they would have caused the death of the game.

Other factors were subsidiary to the two I have just mentioned. For example, a sudden and significant influx of easy gold would likely have caused rampant inflation in the virtual economy of the game. Similarly, gear that players had to be proficient and persistent to obtain would lose its value if anyone could plunk down $20 and get the same stuff. Back when IGE was active, it was more rare to have a max level character than it is today, and the notion that anyone could purchase a max level with real money would have cheapened the accomplishment.

So I give Blizz props for turning IGE down, and for working to eradicate gold sellers and the like from the game. I don’t care what their reasons were, they did the right thing. And they continue to do the right thing today when they go after bots or when they punish players for selling services for real money. Yes, you can still cheat in WoW — the cheat sites are out there — but Blizz is continually refining its detection methods and imposing punishments, such that players really have to think twice about whether or not it is worth it in the end.

Now, of course one of the ways Blizz used to defeat gold sellers was to institute the WoW token — basically legitimizing the practice. I am still not sure if this was a good move, but it was undeniably smart business. Making it two-sided (turn real money into WoW gold and turn WoW gold into playing time) was genius and addressed two player markets — those who had time but not money and those who had money but not time. Additionally, Blizz controls the availability and price, so they can put brakes on undesirable results such as rampant inflation. As an added bonus, every player using gold to get play time has garnered a $20 per month subscription for Blizz rather than the standard $15 one. Genius. But I still think it was a minor backing off from one of the game’s founding principles.

The last thought I have on the whole IGE story is this. Internet gaming, even though it has been around for years, is still in its profit infancy. How the industry — players and spectators as well as developers and investors — deal with cheating will set the standard for the rest of its existence. Thus far Blizz has acted responsibly, I think, although they have been a bit easy on high-profile cheaters. Still, I believe they are on the right path. But the industry could go either way — it could go the route of professional wrestling or it could go the route of the NFL. There is big money in both, but one at least strives to be honest and competitive, and the other — not so much.

I am not so naive as to think greed is not a business motivator, but I am still naive enough to hope there is room for morality, too. For knowing and doing the right thing.

Blizzard just announced that they had “taken action” against some players who were accepting real world currency for in-game assistance, such as carrying players for raid clears. You can read the Blue Post here, courtesy of MMO-C.

This is absolutely reasonable action from Blizz. The activities were clear violations of the Terms of Service agreement, and some forum posters claimed it was getting out of hand — blatant advertisements abounded. I wouldn’t know about that, I tend to be quite naive about these matters. Still, there is a line between the in-game economy and the real world one, at least as far as players are concerned. Blizz went to some pains to point out that raid carries for gold, for example, are perfectly legitimate. It is just when actual rent-spendable money enters in that it becomes illegitimate.

In-game gold versus real-world money is a line most of us can understand, but I wonder if Blizz itself has not blurred that distinction a bit with their introduction of the token. By becoming their own gold seller, they have legitimized a direct connection between real world money and in-game gold. If you have the money, you can pretty much amass as much gold as you want in the game. Yes, you have limits placed on you in terms of how many tokens you can buy over a period of time, but if someone is patient and well-off, they can easily max out gold on every character on every account.

Not that having millions and millions of gold gets you much in the game nowadays, beyond a certain Scrooge McDuck feeling of wallowing in wealth. The reason Blizz’s gold selling has not become pay-for-play is that they have severely curtailed the number of game-enhancing buyable items available. In WoD, for example, you could buy competitive high-level crafted gear, but you were limited to equipping just three such items, thereby ensuring players with a lot of gold could not immediately outfit themselves with raid-level gear. In Legion, Blizz allows unlimited pieces of crafted gear to be equipped, but they prohibit selling (thus, buying) such gear above level 815. It can only be upgraded if it is soulbound — again, prohibiting wealthy players from easily (if expensively) outfitting themselves with high level gear.

Another thing the token has done is give everyone a quantitative way to value in-game items and activities. In the U.S., one token currently buys you approximately 90k gold, and it costs $20. Thus, if for example a guild is selling Nighthold clears for 200k gold (I have no clue if this is the going rate or not), a player contemplating buying the service can know that this means the true cost to them is $30-$40. (If the player is an in-game buyer of tokens as a way to pay for their subscription, then the cost is approximately $30, or two months’ play time. If the player is an in-game seller of tokens for gold, then the cost is $40, or about two game store token purchases.)

Similarly, if a piece of BoE gear is priced at 100k gold, a player can evaluate whether or not it is worth one month’s play time ($15), or $20 of their hard-earned cash from the other perspective.

Still, even if the real world versus game world line has become a bit blurrier, it is still there, and it certainly does not justify crossing it.

Which leads me to the other aspect of Blizz’s announcement that gave me pause. Of note, they indicated some of the presumably-banned players were members of world-first guilds. This is troubling, for basically the same reason I discussed in a previous post: that is, it indicates a lack of high standards of integrity in these guilds. Let’s be honest — there is no way guild management could have been unaware of the money-grubbing actions of the members engaging in this illicit business. But for whatever reason, the guilds these players belong to chose to do nothing about it — the best you can say is they gave tacit approval, and the worst is that they may have shared in the profits.

I know I will get hate mail for this, but given the apparent high profile of some of the guilty ones, I think in this case a bit of naming and shaming might have been in order. If not the actual players involved, then maybe the guilds they belonged to. “Don’t do the crime, if you can’t do the time.” Maybe a little guild embarrassment would be good incentive to police their own members in future.

How much better it would have been if, when the guilds suspected some of their members were doing it, they issued explicit instructions to knock that shit off or face expulsion. At the very least, they might have taken a page from professional sports and benched the offending players for some amount of time or levied a fine of some sort. Any guild sanction would have demonstrated these professional guilds are serious about policing their own, serious about upholding high standards of behavior. Sadly, insofar as any of us knows, they did not.

I am certain I could play this game forever and not give a flying fig about world first achievements or the inner workings of the professional guilds. I do not care about the pseudo-celebrity players in them. But I do care that some of the players and guilds I encounter in the game seek to emulate those semi-pro players and their guilds. If their role models are cheats and chiselers, then that attitude may well spread down through the game, and it will take away from my enjoyment of it.

In a perfect world — or even an above-average one — guilds would be incensed if their members cheated, and they would take drastic and public action to ensure everyone knew such behavior was unacceptable, to uphold the rules of the game they play, indeed the game they are leaders in. But sadly this is not the case, and we are left with some guilds that get while the getting is good, knowing they need take no responsibility because Blizz will step in and police their players for them. Well, good for you, Blizz. And shame on you, all you who know who you are.

This was the only change noted for destro lock new tier gear. Yeah, Blizz, way to go, nice job replacing correct grammar with incorrect grammar. Because, well, clearly tooltip grammar is the only problem with destro locks in this expansion.

Actually, if you think about it, this stupid incorrect change is emblematic of Blizz’s whole dev approach these days. First, they are focused on tiny details but completely oblivious to the big pictures. There are TONS of HUGE problems with destro locks, but here is some staffer going over tooltip grammar with a fine tooth comb.

Second, this staffer apparently has absolutely no idea how to correctly use English indefinite articles, but firmly believes that whatever way (s)he uses them is the correct way. No research, no cross checking, just “that’s not how I say it, so I’ll change it.” Sound familiar? Kind of like “That’s not how I like to play the game, so I’ll change it to make sure it is played my way.”

And third, where is the adult supervision? Someone who obviously has very little grasp of English is given the task of correcting tooltip grammar? What supervisor made that assignment? Makes you wonder about all the other “tweaks” we see in the patch notes, doesn’t it? Do the people making “class balance adjustments” have any idea what they are doing, and who if anyone is supervising their decisions?

Anyway, on to today’s real topic, which is, several of the bloggers I follow, not to mention Yours Truly, have posted tinfoil hat theories in the last few days. Check out The Grumpy Elf, Marathal at Rambling thoughts about WoW, alt:ernative chat. (Plus some large number of forum contributors, which come to think of it given the nature of forum “discussions” these days maybe we should just not acknowledge, as most of them are probably wearing theirs as they write about them.)

It could just be coincidence that far-out but maybe not so far-fetched theories are appearing seemingly at the same time. But I think there is a better, more obvious explanation: Blizz has given us so little to write about in this expansion and is so uncommunicative that about all anyone can do is speculate. And the more time you have to speculate, the wilder your theories get.

Blizz is in the process of slowly winding down the 10-year-old World of Warcraft, possibly as soon as 2017, but certainly by 2018. The widely-perceived failure of WoD highlighted some of the compelling reasons to do this — the complexity of maintaining aging code that grows vastly larger every year, the stress load on what is likely an outdated server and network structure, a story line that makes less and less sense with every expansion, and player base expectations that this technologically old game conform to modern game models. It just is becoming impossible to even maintain this structure, much less add to it.

Having decided on a timeline to shut the game down, Blizz is taking steps to maintain its cash flow while it creates the WoW replacement. And it needs to do so with a bare minimum of resources, because they are transitioning as many as possible to the new game.

One of the ways to maintain player base and thus cash flow is to roll out patches and a couple of expansions on the cheap. WoD is the first of these xpacs. There will likely be one more, but don’t expect it to be any better quality than WoD. Similarly, the patches are more cosmetic than engaging, featuring a few major bug fixes and some fluff toys, maybe some raid and instance reruns.

Another way to maintain cash flow is to increase the subscription price, but Blizz knows that to do so for the regular subscription would probably be a net revenue loss, due to people unsubbing. Enter the brilliant idea of the token — and for once I am not being sarcastic when I say that. It really was a stroke of genius. Blizz now gets a significant number of players to pay 33% more for a month’s worth of service, and by doing so using the auction house shuffle, they may actually not only increase the number of active players but also extend the timeline for keeping players.

The key to this cash cow, however, is making it attractive enough for the players who provide the hard cash, those who spend the real world currency to buy the tokens to put up for sale in the auction house. So Blizz does not let pure supply and demand dictate the gold value of tokens, because sooner or later the market would reach a state of equilibrium — most people who want to purchase “free” game time would have done so to the extent they want, and the gold value of the token would have gone so low that very few would think it worth the cash outlay. (Or the usual cash-payers would have sufficient gold to start buying game time tokens, compounding the problem!)

To stop this from happening, Blizz sets the prices for tokens in the auction house by using their own formula for maximizing their cash accrual. They tell everyone it is “based on” supply and demand to some extent, but that factor is in reality very minor.

Another way they prevent the equilibrium state from occurring is by enticing their cash buyers to immediately spend their newly-bought gold, not save it. (This is where Grumpy’s post fits in.) If people only buy a couple of tokens and figure they are set for gold until the next expansion, Blizz’s new cash source dwindles to a mere trickle. Heck, there are probably also players out there who feel like they have no need to buy gold at all, since any BoEs or other shinies they might want are outrageously expensive. Enter Blizz’s enticement program, and suddenly if they only had about another 20k they could get That One Thing They Have Been Hankering For But Has Been Out of Reach Until Now, and for only $20 they could now have it.

You heard it here first, folks. By 2017 we will be talking seriously about the follow on to WoW. Meanwhile, get used to bargain-basement patches and expansions and to more Blizz schemes designed to part you from more and more of your cash.

Since I usually write about my experiences in game, and since these days most of those experiences consist of garrison chores, out of boredom (or maybe the haze induced by my allergy meds) I decided to indulge my inner conspiracy theorist today. And anyway, since Blizz refuses to communicate with us in any meaningful way, wacko theories are about all we have to go on as explanations for most of their actions lately.

So here’s my latest tinfoil hat theory. It is about the WoW token and the secret Blizz machinations that they so blithely attribute to “supply and demand.” Mmmmmhmmm.

Take a look at the token’s value on each of the three regions it sells on. If you convert all the real money values into dollars, what you see is that North Americans buy tokens for $20, Europeans for $22, and Chinese for $5 (exchange rates at time of this writing, rounded off to nearest dollar). The Chinese model is not a subscription, rather a time card arrangement that allows — I think — 2700 minutes of game play, and the minutes last until they are used up, whether that is in one week or 6 months. At any rate, the amount and/or method of game play is irrelevant to my theory.

What we will look at is Blizz’s role as a gold seller. That is, how much gold will your dollars buy you? One glance at the regional graphs shows you there are vast differences. For example, just now the real world dollars spent on a token will buy North Americans 26,000 gold, Europeans 42,00 gold, and Chinese 66,000 gold. This works out to the rate of one dollar buying North Americans 1300 gold, Europeans 1900 gold, and Chinese 13,200 gold.

(On the flip side, of course, if you are buying game time with gold, it costs NA and Euro players much less than it does Chinese players. Coincidence? I think not!)

Well, you might say, that is because the Chinese demand for game time paid with in-game gold is far higher than in NA. And after all, Blizz has explained that they will set the rate based on supply and demand. I will counter with the observation that — absent any hard data from Blizz, what a surprise — one good way to gauge relative levels of supply and demand is by the wait time to sell a token. If Chinese demand for them is so vastly higher — on the order of a magnitude of 10 — than in NA or Europe, then they should sell roughly 10 times faster. Certainly the sell times for Chinese tokens should always be 30 minutes or less if the demand is so great relative to supply.

But no, what we see most often in the graphs is that the Chinese sell times are usually in line with the NA and European sell times.

If you have read any of the admittedly sparse studies on WoW gold (here’s one example), you know that since many gold farmers are Chinese, there is likely a huge amount of player gold sitting in that region. I suspect most of it is legitimate, too, as basically gold farmers are the sweatshop workers for gold sellers, making gold in game us what they do for a living. Even those who do not use illegal hacks or bots have learned how to grind out gold in the most efficient way.

The point is, there is almost certainly much, much more player gold sitting in China than in NA or Europe.

Similarly, although I do not have any scholarly sources to back this up, there is anecdotal support for the claim that European players average more gold than do NA players.

Now to the theory: Blizz pegs the cost of in-game tokens to an estimate of total player gold within the region. Supply and demand may be a factor, but if so it is a very minor one, affecting the token price (and thus the price of gold for the initial buyer) only within already-established upper and lower limits. That is, Blizz first establishes maximum and minimum allowable auction house prices for tokens for each region, then allows some fluctuations within those established limits, that it attributes to supply and demand forces. I suspect, for example, no matter how much demand there ever is for tokens in NA auction houses, they will never go above 35,000 gold. My wild-ass guess is that Blizz has established the NA token prices to be within 15k-35k. And they have established similar bounds for Europe and China, based on their estimate of how much player gold exists in those regions.

Any articles I have seen about player gold reserves — and there have been very few especially lately — do not break anything down by region. Also, most of them rely on self-reporting by players who voluntarily respond to surveys. I have serious doubts about the validity of any survey thus conducted, especially if players are asked something like “What is the size of your gold stash?” No chance of exaggeration there, right? But what that means is that only Blizz has any idea what the amount of player gold is by region. We will likely never know.

And for that reason — complete ignorance of the facts — I stand by my conspiracy theory, indeed will defend it to the death, because that’s the tradition in these kinds of theories and who am I to change tradition?

OK, that’s it for today. If I have introduced a little more paranoia and wackiness into the world, then my work here is done.